NEW YORK (Reuters) – Morgan Stanley (MS.N) said on Sunday it hired former Merrill Lynch President and Chief Operating Officer Gregory Fleming to run its investment management group.

Fleming -- one of the architects of Merrill Lynch & Co Inc&&9;s sale to Bank of America Corp (BAC.N) -- will be president of Morgan Stanley Investment Management, which includes the firm&&9;s merchant banking business. He will also be responsible for Morgan Stanley&&9;s global research and will report to incoming Chief Executive James Gorman, the firm said.

Fleming left Bank of America after the deal closed in January and has been working as a senior research scholar at Yale University. He has been portrayed as a key proponent of the sale of Merrill Lynch at the height of last year&&9;s financial crisis despite initial reluctance from then-Merrill CEO John Thain.

In Andrew Ross Sorkin&&9;s book on the financial crisis, "Too Big to Fail," Fleming was also credited with getting Bank of America to agree to pay Merrill bankers 2008 bonuses up to the same level as in 2007. He also got the bank to agree to an airtight "material adverse change" agreement, meaning that even if Merrill&&9;s businesses continued to deteriorate Bank of America couldn&&9;t easily back out of the deal low fee payday loans.

Both elements of the deal proved to be very controversial as public outrage was sparked by news about the bonuses and as figures in subsequent months showed that Merrill&&9;s businesses were in worse shape than had been publicly acknowledged and Bank of America CEO Kenneth Lewis threatened to back out of the deal.

Fleming joined Merrill Lynch in 1992 and from 2003 to 2007 co-headed Merrill Lynch&&9;s markets and banking group. Fleming, a noted rainmaker who focused on financial companies, oversaw Merrill&&9;s investment banking.

He will be joining Morgan Stanley in February. Fleming&&9;s hiring follows a shuffle of executives announced earlier this week when Gorman pegged Morgan Stanley&&9;s chief financial officer and head of investment banking to run its crucial institutional securities unit.

(Reporting by Michael Erman, additional reporting by Martin Howell, editing by Martin Golan)

Morgan Stanley hires ex-Merrill COO Fleming

WASHINGTON (Reuters) &<51; Sales at United States retailers rose more than expected in November as consumers spent more on gasoline and a wide range of other goods, data showed on Friday, raising hopes of a self-sustaining economic recovery.

The Commerce Department said total retail sales increased 1.3 percent last month, the largest advance since August, after rising by a downwardly revised 1.1 percent in October. It was the second straight monthly gain. Sales in October were previously reported to have increased 1.4 percent.

Analysts polled by Reuters had forecast retail sales gaining 0.7 percent last month. Overall sales in November were helped by strong receipts from gasoline stations and increased purchases of motor vehicles and parts, building materials and electronic goods, among others. Gasoline sales surged 6 percent, the largest increase since June.

Compared with November last year, sales were up 1.9 percent, the first year-on-year gain since August 2008, a Commerce Department official said.

The data should help to ease concerns that the economy&S217;s recovery could falter because of lackluster consumer spending. The economy resumed growing in the third quarter, mostly because of government spending.

With the labor market starting to stabilize and household wealth rising, there is growing optimism that consumer spending will soon pick up.

Excluding motor vehicles and parts, retail sales increased 1 free credit report online.2 percent in November, the largest increase since January, after being flat in October. Economists had expected a 0.4 percent increase.

Core retail sales excluding autos, gasoline and building materials rose 0.6 percent, advancing for a fifth straight month.

Sales of building materials climbed 1.5 percent last month, the biggest gain since April 2008, after falling 1.8 percent in October. Purchases of electronics and appliances jumped 2.8 percent, the largest increase since January. The strong report on retail sales came as the Labor Department reported a rise of 1.7 percent in import prices in November, their largest gain since June, driven higher by fuel costs.

Analysts polled by Reuters had expected a slimmer rise of 1 percent. October&S217;s gain was also revised up to 0.8 percent from the 0.7 percent previously reported.

Import prices have been steadily rising over the last year and have increased during eight of the last nine months, the Labor Department said. They also rose 3.7 percent from November 2008 in the first annual gain since the October 2007-2008 period.

Excluding petroleum, import prices were up a much slimmer 0.7 percent in November.

U.S. Retail Sales Exceed Forecasts

BRUSSELS (Reuters) &<51; European Union regulators accepted on Wednesday a pledge by the chip maker Rambus to cut royalties worldwide on computer memory chip patents for five years to settle antitrust charges and avoid a possible fine.

Under the settlement, the chipmaker will not be found liable for any wrongdoing, the European Commission said in a statement.

The commission, following complaints from Infineon Technologies of Germany and Hynix Semiconductor of South Korea, had charged the company in 2007 with abusing its dominant position by claiming unreasonable royalties.

Rambus, based in Los Altos, Calif., made its offer to settle in June and this was market-tested by the commission, the executive body of the 27-country European Union.

&S220;The commitments in their final form, as modified by Rambus, are adequate to meet the competition concerns expressed in the statement of objections,&S221; or charge sheet, the statement said.

As part of the settlement, Rambus will cap royalties at 1.5 percent for the later generations of JEDEC DRAM (dynamic random-access memory) standards for five years bad credit pay day loans.

JEDEC is a standard-setting organization for the chip-making industry. JEDEC-compliant DRAMs represent around 95 percent of the market and are used in virtually all personal computers.

&S220;An effective standard-setting process should take place in a non-discriminatory, open and transparent way to ensure competition on the merits and to allow consumers to benefit from technical development and innovation,&S221; the competition commissioner, Neelie Kroes, said. &S220;Abusive practices in standard-setting can harm innovation and lead to higher prices for companies and consumers. For its part, the commission will vigorously enforce the competition rules in this area,&S221; she added in the statement.

The commission said the five-year pledge would ensure the decision covered any claims of Rambus based on patents, and patent applications, dating back to when it was a JEDEC member.

Europe Accepts Settlement Offer From Rambus

(Reuters) – Federal prosecutors investigated Galleon Group hedge fund founder Raj Rajaratnam on suspicions of insider trading more than a decade before he was charged with securities fraud, the Wall Street Journal reported, citing legal filings.

However, the prosecutors were unable to prove their suspicions, the paper said.

The investigation stemmed from suspicions that arose in the 1990s within chip maker Intel Corp (INTC.O) that Rajaratnam was receiving tips from an Intel insider.

Intel could not immediately be reached for comment by Reuters outside regular U low fee payday advance.S. business hours.

The Sri Lankan-born billionaire was arrested on October 16 and accused by prosecutors of generating millions of dollars of illegal profits in the largest U.S. hedge fund insider trading case on record.

Rajaratnam has denied the charges.

(Reporting by Santosh Nadgir in Bangalore; Editing by Muralikumar Anantharaman)

Prosecutors investigated Rajaratnam a decade ago: report

NEW YORK (MarketWatch) -- Benchmark stock indexes in Mexico and Brazil closed higher Wednesday, adding to the prior session's rally, after J.P. Morgan upgraded Mexico and industrial production in Brazil improved for a 10th month.

Mexico's IPC index rallied 1.1% to 32,112 and Brazil's Bovespa gained 0.3% to 68,615.

The swing in Mexico's economic growth in 2010 is predicted to be 0.5% from this year, one of the largest turnarounds in emerging markets, J.P. Morgan analysts wrote in a research note. Still, the nation's stocks are under-owned, and growth in the U.S. will be a big boost for one of its largest trading partners, Adrian Mowat and Ben Laidler said.

Among the shares J.P. Morgan now rates at overweight, Ternium's U.S. shares gained 2.5% and brewer Femsa's shares rose 1.4%.

DOW INDUSTRIALS (DJIA)

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Separately, bank concern Banorte jumped 3.5% in local trading.

Among some of the most actively-traded Mexican companies, U.S. shares of fixed-line telecommunications firm Telmex advanced 2 fast cash.6%.

Retailing giant Wal-Mart de Mexico gained 3.9% on U.S. exchanges.

U.S. shares of wireless giant American Movil declined 1.7% while cement maker Cemex slid 0.5%.

In ETF action, the iShares MSCI Mexico Investable index rose 1.4%

Meanwhile, iShares MSCI Brazil Index gained 1.1%.

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Industrial production in Brazil rose 2.2% in October compared to the previous month, the national statistics agency said.

Utility companies led the advance, with local shares of Centrais Eletricas Brasileiras up 8.5% and Eletrobras shares gaining 6.6%.

Petrochemicals company Braskem's U.S. shares rose 4.2%.

Steel firms were among the gainers, with U.S. shares of Gerdau up 2.5% and CSN advancing 2.4%.

Oil giant Petrobras declined 0.1%.

Elsewhere in South America, Argentina's Merval index advanced 0.5% to 2,221. In Chile, the IPSA index gained 0.6% to 3,344.

Latin American Markets: Latin America stock rise; analyst upgrades Mexico

The insurance giant American International Group said on Tuesday that it had closed two debt-for-equity transactions that reduce its debt with the Federal Reserve Bank of New York by $25 billion.

A.I.G. said that under the agreement the New York Fed would receive preferred shares with a liquidation preference worth $16 billion in American Life Insurance Company and $9 billion in American International Assurance Company Ltd., which would be placed in special purpose vehicles .

The insurer said that the special purpose vehicles would prepare the two subsidiaries for initial public offerings or third-party sales, and in a separate statement said it was moving forward with the separation of American Life Insurance.

The liquidation preference is an undisclosed percentage of the estimated fair market value of the two A.I.G. units. A.I.G. retains the common interests in American Life and American International Assurance, and thus would benefit should the market valuation of the two units be in excess of $25 billion low fee payday loans.

A.I.G. said that as of Tuesday, its outstanding principal balance under the New York Fed credit facility was about $17 billion and the total amount available under the facility had been reduced to $35 billion from $60 billion.

&S220;We continue to focus on stabilizing and strengthening our businesses, but expect continued volatility in reported results in the coming quarters, due in part to charges related to ongoing restructuring activities,&S221; the A.I.G. chief executive, Bob Benmosche, said in a statement.

A.I.G. in Debt-for-Equity Swap With New York Fed